Gabe Newell confirms Source Engine 2 in development

Back in August, some coders decided to have a peek at the many lines that make up the Source Filmmaker and discovered some references to a Source 2 engine. Valve didn't confirm the subject at the time, but recently co-founder Gabe Newell has: Source 2 is in development.

Some 4chan members recently visited Valve's headquarters to deliver Newell's 50th birthday cake and also question the boss. Various matters were discussed, but the biggest one was in relation to the new engine. Newell confirmed Source 2, but said the studio needs a game to go with it:

We've been working on Valve's new engine stuff for a while, we're probably just waiting for a game to roll it out with.

Now, like most people, you're probably yelling at the screen to release Half-Life 3, and that'd be a very fair assessment. Newell did confirm that Ricochet 2 is in development, which has been jokingly referred to in the past whenever mention of HL3 surfaces. So, maybe we'll be getting Half-Life 3 on Source 2 or maybe something else, like Half-Life 2: Episode Three.

ive never played half life, but its always confused me...i thought half life 3 and episode 3 were the same thing

also:

"so how many of you are bronies?"

out of nowhere!

From about 2006-2011 it was supposed to be Episode 3 but now all the "leaks" and such are about Half-Life 3. Episode 3 would only likely consist of about 5-9 chapters and last 2 hours or so, whereas HL3 should be nearer 15-20 chapters and several hours of gameplay